An allergy to democracy

[Robert Weissman <rob@essential.org>]

If autumn is the most beautiful time in New England, it is the most
dangerous in Washington, D.C. -- at least that is so every two years, when
members of Congress are rushing to get home to attend to election races.

In the frenzy of backroom deal-making that constitutes the law-making
process at the end of election-year congressional sessions, corporations
line up to add favored special-interest provisions (known as "riders") to
spending bills. 

The process was particularly murky and corrupt this year. With Congress
unable to reach agreement on more than half the spending bills it must
pass to enable the government to function, it decided to wrap them into a
single "omnibus" bill, the terms of which were negotiated in secret among
a few members of Congress and the White House.

Jumping to the front of the corporate handout line was Schering-Plough,
the maker of the popular allergy drug Claritin, and hardly a company in
need. (You know Claritin: it's the one advertised pervasively on
television, in magazines and on billboards with pictures of meadows and
"blue skies.")

Following Schering-Plough maneuvers that won two separate patent
extensions on the drug, the Claritin patent is now set to run out in the
year 2002. That will enable generic producers to begin making the drug,
which they will sell at prices far less than Schering-Plough charges. 

Since generic products typically sell at prices 30 to 60 percent less than
brand-name pharmaceuticals, consumers can expect to reap big savings. With
1997 sales of Claritin totaling $869 million, the 30-to-60 percent
discount rate would save consumers between $261 million to $521 million a
year.

Those savings, however, will come at the expense of Schering-Plough's
monopoly profits.

What's a multi-billion dollar company to do? 

Well, when you are a corporation of that size and face problems, you call
up your senator. So the New Jersey-based company turned to Senator Frank
Lautenberg, D-New Jersey, and asked him to insert a provision in the
omnibus appropriations bill which would allow pharmaceutical manufacturers
to petition the Patent and Trade Office to extend the patents of a small
class of drugs (seven in total). Claritin is by far the best-selling among
those seven drugs.

Schering-Plough spends more than $2 million a year on lobbyists. In recent
years, those lobbyists have diligently, but so far unsuccessfully, lobbied
for adoption of the patent-extension provision. With the secrecy and chaos
surrounding the drafting of the omnibus appropriations bill, they thought
they had finally found the opportunity for which they had been waiting.

Unfortunately for Schering-Plough, the patent-extension scheme was
discovered. The consumer group Public Citizen and the generic manufacturer
trade association began publicizing and lobbying against the proposed
Claritin rip-off.

"Claritin's manufacturer, Schering-Plough, had 1997 profits of $1.2
billion, a 17 percent profit rate," says Dr. Sidney Wolfe, director of
Public Citizen's Health Research Group. "It is unconscionable that seniors
on fixed incomes could be required to pay hundreds of dollars more a year
to further boost the company's bottom line." By way of example, Wolfe
estimated that Schering-Plough's proposed private Claritin "tax" would
cost consumers of the pill in the Washington, D.C. area $246 to $492 a
year.

With Public Citizen and the generic makers shining the light of day on the
Claritin scam, the plan withered. The final omnibus appropriations bill is
not expected to include the Schering-Plough welfare provision.

And that's why big corporations have an allergy to openness and democracy. 

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor.

(c) Russell Mokhiber and Robert Weissman

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